It makes no odds really.

The account will still show as being Defaulted for 6 years before it drops off so will still appear as such to the mortgage brokers.

You can raise a dispute with Shop Direct or the CRA's to get them to amend it

Hi Gary,
Thanks for the quick reply. I think it does matter as the mortgage company would have been fine to lend if 6 months had elapsed, and I suspect we would have access to better deals had 12 months elapsed.
As I mentioned the CRA just ask Shop Direct, who obviously won't admit any fault, so the CRA won't change it, and trying to get Shop Direct to do anything directly is near impossible. Anyone got any other advice or experienced a similar thing?
Also is what they've done correct or not? Would the financial ombudsman be able to help?

Between July 16 and Feb 17 were you able to use the account? And were you using the account? Also when was the first payment missed? How much was the debt.

The bit that concerns me is "This was fully paid off in July 2016.... At the time she requested that they then closed the account."

If it was a default, she shouldn't have had a choice - it would have been closed by them, whether she paid it or not. I'm thinking it's more along the lines of an arrangement to pay where they agreed with her to pay less (so a negative, but not as bad as a default).

Either way it sounds like they've recorded it wrong on your credit files.

Are you able to printscreen and upload a copy of the account from your credit report (obviously blank out DOB, address, a/c number etc using Paint or similar).

Upload it to something like www.imgbb.com and put the link here (without the http:// and the www, as you're new, so it won't let you) - it's going to be hard to advise without knowing exactly what your credit report says for that account, and whether it was in use between 2016 & 2017.

ibb.co/mBHi8G

Here's the account. I'm not sure if she was able to use the account as it hasn't been used since the initial purchase.

It looks like they never formally defaulted her back in 2013, just put her on Arrangement to Pay (AP markers). Do you know if she got a default letter? It could well be they've just messed the system up -
but the arrangement to pay antics are common with these type of companies.

The problem with AP Markers is that the negative history is carried forward a lot longer as it looks like it's ongoing right the way through until the last AP marker (or subsequent late payment/default marker if AP is breached).

From that history, it looks like she had problems at the start of 2013 too, then potentially brought the account up to date (April)?? But then there was a query, and it quickly escalated to 6 months late followed by an arrangement to pay, which then ended or was broken 2 years later, returning it to 6 months defaulted - then as you say bought up to date in August, dormant for a bit, then satisfied.

Even if they satisfied the account in August, I still don't think you'd have got the mortgage - because they've technically helped you (a tiny bit) leaving it open an extra few months before making it satisfied.

The real (big) issue here is the late payments in 2013 and associated Arrangement to Pay.

How much was your girlfriend paying between Oct/Nov 2013 (AP Marker starts) and October 2015 when it ends or is broken (they can be for a set time (e.g. 2 years) during which time she's expected to bring the account up to date (and didn't, hence back to 6 status), or indefinitely until the arrangement is breached.

If they payments between 2013 and 2015 were minimal in relation to the debt (which I'm assuming was about £150 given the credit limit?), then really Shop Direct should have defaulted her in 2013 - meaning the default would now be over 3 years old and wouldn't be having a massive effect on the mortgage. If there were no payments between 2013 & 2015, then it looks like it should have been a straightforward case of them defaulting her in 2013.

As it is now, it appears there were money troubles right up until July 2016 - whenever the account was settled - so you'd understandably still struggle with a mortgage. The only blessing is that looks like it's low value, and it's mail order - many mortgage companies will overlook that a bit, because they know Shop Direct et al. play these kind of silly games.

It looks like, depending on what the payments were between 2013 & 2015, that your best argument is going to be that she should have been defaulted back in 2013, with the default satisfied in July 2016.

Your next step is going to have to be a formal complaint to Shop Direct - but your answers to the above determine what goes in the complaint, and how much 'power' you/your GF will have over them to fix it.

Sadly, it won't be a quick fix - probably looking at 2 or 3 months minimum.

If you really need the mortgage to go through before it's resolved, take a printout of your file to a broker and they should be able to help you (assuming there are no other problems)

Hi Somerset,

Thanks for the really detailed reply. I believe it was put into a debt management plan, but then the debt management plan was changed to a different provider as the first one was paying the debts late and also charging for the service! I think this was around November 2015 which tallys with the date it reverted to 6 months.

The payments were certainly minimal, I don think they were more than £10-£15 a month at most.

What's the procedure with a formal complaint and do you think it would really be worth it? We're going to see an independent mortgage advisor next week so we will also check what he says.

The part that confuses me is that we got the AIP in the first place then got declined. Are there even more checks carried out when the mortgage company come to finalise the offer and actually give us the money, as the way our last mortgage advisor made it sound if we hadn't messed around with the account in February it would have gone through?

Thanks

Was that Debt Management Plan with several other debts? I'm assuming so.

If you can find out how much was being paid on to Shop Direct (likely very little, as sounds like your DMP provider would've taken management charges), then you've potentially got a good case for it being defaulted back in 2013.

If you can't login to the online account anymore, Shop Direct should even be able to give you a statement if you ask for it. Don't mention a complaint (yet).... or they'll try to charge you, just say you want all transactions..... for your records. Then use that information to hit them over the head with later on.....

If you can find documentation of them getting something silly like 90p a month, there's a real case for it being a default, as it's essentially just a token payment rather than properly servicing the debt in a reasonable timeframe.

For example ICO Guidance to their officers in 2015 as posted by fermi (http://forums.moneysavingexpert.com/showpost.php?p=68473912&postcount=5) suggested

You could argue that by accepting your girlfriend onto an Arrangement To Pay, for what was likely a minimal/'token' payment, she is now in a worse position as shop direct let the situation drag on for years, whilst then being happy to accept full payment from her further on (if they'd defaulted the account in 2013, then when it came to Aug 2016 you could have easily negotiated a reduced payment of say 20 or 30% rather than paying the full whack).

I'd speak to Citizens Advise regarding how to complain, unless anyone on here has some template letters or you make your own.

Essentially you want them to register a default in 2013 or whenever your girlfriend was initially "several" (normally about 6) months after the last proper contracted payment - so October 2013 at the latest from that printscreen, but may be earlier depending on what 2012 history was like, as it's dropped off the status record now.

You then want the default to be marked as settled in July/August 2016 (when the payment was made).

That would give then give her a default that is now 4 years old, and has been fully satisfied for over 1 year. If they're the only issues, you'll be fine once that's all reflected on her credit file.

Check with your broker, but its highly likely the above (4 year default, 1 year satisfied) will be viewed a lot more favourably than the current state of affairs. If the broker agrees that to be the case, and worthwhile pursuing, then look at making a complaint either individually or with the help of CAB.

It may be the broker can find you a different deal, once they 'present' your case to the lender and explain that effectively this account should have been long gone.

Depending on the interest rate & terms you get offered, you'd then need to decide whether it's worth pursuing Shop Direct or not.

The AIP may have been conducted with a different credit reference agency, which may not record the account, or may not record the details exactly the same way if at all (the data reported across all 3 can vary). Ultimately an AIP often isn't worth the paper its written on - it's a good indicator, but as it's only in principle they can change their mind.

The last mortgage adviser is probably just going by what the lender told them - and the lender is probably just referred to "an account settled in February 2017", hence the confusion.

With the account looking how it is now, you'd have had the same issue whether it said Feb 17 or July 16 - there's just been some confusion in relaying that to you.

Hi Somerset,

Thanks for all the advice. We'll have a chat with our mortgage advisor and see what he says, as you say it might be that he can find something, or should definitely be able to tell us which of the two options will put us in better stead to get a mortgage.

I'll also ask my girlfriend to get in touch with Shop Direct to get a statement.